RMC is closing Westphalian kiln

Published:
02 July 2004

The RMC Group is splitting out its cement operations from its geographical management structure to be run as a separate business to include all of the group¹s cement manufacturing and trading operations. In Germany, RMC is making its contribution to the removal of excess capacity by closing its Mersmann kiln at Beckum, leaving its remaining Beckum kiln as the group¹s sole clinker producing unit in North-Rhine Westphalia. In order to reduce transport costs, logistics savings deals have been concluded with all the major German cement producers that is likely to put an end to long distance shipment by rail across the country. The British cement operations have suffered from a number of stoppages at the Rugby cement works, now related mainly to the opening up of a new clay resource, rather than to plant technology.

German ready-mixed concrete prices have to date been improving somewhat faster than cement prices, reducing the fear of an adverse squeeze on the Readymix business. Ready-mixed concrete prices in Austria are also improving. France has been stronger than expected, with most of the increased volume coming from the housebuilding market, which has also been beneficial to prices. In Great Britain, ready-mixed concrete prices have suffered from weaker demand in the south-east of England and in East Anglia, where blacktop sales are also down. The British aggregates business has been hit by the mix and by lower prices at the bottom end of the market but the underlying price picture remains positive.

The US business has been showing a strong improvement on the back of a continued good housebuilding market, a reduced cost base and some improvement in commercial building activity in California, Florida and Georgia. Elsewhere overseas, Dubai is a particularly strong market, thanks to high levels of demand. For the full year, RMC is expecting capital expenditure to amount to around £200m, with about half of this having been incurred during the first half.